July 21, 2020 Read More →

India banking on coal for pandemic economic recovery


India is hoping that coal can propel its economic recovery from the pandemic after Prime Minister Narendra Modi last month ended a four-decade state monopoly on the fossil fuel.

More than 1,100 bidders, including dozens from outside India, have joined the virtual auction to sell 41 state-owned mines, according to coal minister Pralhad Joshi. The interest is significantly higher than what some analysts had predicted: The Institute for Energy Economics and Financial Analysis expected no foreign entities to bid. Aug. 18 is the deadline for submissions.

The sales fly in the face of India’s stated goal of slashing coal production in half by 2030. Three-fourths of the country’s electricity is generated by coal, making it the globe’s biggest consumer behind China. Auctioning coal rights to investors is estimated to generate nearly $7 billion, according to Modi’s office, and could boost the country’s domestic supply while decreasing reliance on imports.

“Let’s make no mistake, India’s power sector will be heavily reliant on coal for the next couple of decades,” IEEFA research analyst Kashish Shah said.

[Catherine Boudreau, Michael Grunwald, Nancy Vu]

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